The bad business environment has forced several large Vietnamese firms into bankruptcy this year, while others have had to merge.
The Habubank-SHB merger
Established in 1989, with hundreds of branches around the country, and over VND4 trillion (USD192 million) in charter capital, the Hanoi Building Commercial Joint Stock Bank (Habubank) was incontestably a big player in Vietnamese financial market.
However, it was forced to merge with the Saigon-Hanoi Commercial Joint Stock Bank (SHB) and give up their trade name due to very large losses, over VND4 trillion.
The cause of Habubank's fall has been widely blamed on the fact that they dealt with only a small number of large customers. The debt of Habubank's 50 major customers accounted for 65% of their losses.
A large portion of those losses came from a loan to Vietnam Shipbuilding Industry Group (Vinashin) and investment in Binh An Seafood Joint Stock Company (Bianfishco), amounting to over VND767 billion. Both of these large clients ended up defaulting on their loans, costing the bank a substantial amount.
According to an audit conducted last year, the bank's capital was VND195 billion and their non-performing loan ratio was 16.06%, by the measures of the Vietnam Auditing Standard.
On August 9, 2012, SHB spent about VND 2.1 billion to re-brand Habubank to SHB.
Well-known steel brand vanishes
The steel industry also saw merger and acquisition activities in 2012, involving well-established names, such as Pomihoa, of the Tam Diep Steel Company.
Pomihoa was established in 2000, and became a well-known name on the market. The company recognition for the quality of its steel and, in 2008, was the largest contributer to the state budget, paying in VND110 billion.
However, after the Japanese company Kyoei Steel launched a joint venture with Tam Diep Steel Company, Kyoei owned a 70% stake in the company, with the rest belonging to Tam Diep and the Pomihoa. The name of the company will now be changed to Kyoei Vietnam.
The Pomihoa plant was sold in 2011, amid the economic downturn, and many experts have blamed poor management.
Viettel acquires EVN Telecom
EVN Telecom of Electricity of Vietnam Group (EVN) was merged with Viettel Telecom Group.
EVN Telecom went into operation in 1995. It was provided modern facilities and equipment and skilled workforce. Still, after 15 years, EVN Telecom has shown enormous losses.
In 2009 EVN Telecom's revenue was just VND3 trillion, a 19% drop from 2008.
According to the State Audit Office of Vietnam, EVN Telecom has continued to losing money since 2010.
On December 5, 2011, the Prime Minister ạpproved the merger EVN and Viettel Telecom, erasing the EVN Telecom name from the market.
